Medicare Skilled Nursing Facility Prospective Payment System

Audiology and Speech-Language Pathology Services

Skilled nursing facilities (SNFs) that provide services to Medicare beneficiaries are paid under a prospective payment system (PPS) through Part A of the Medicare benefit. Audiology and speech-language pathology services are bundled into the PPS payment. The SNF is responsible for providing all medically necessary services. If a patient needs audiology and/or speech-language pathology services based on their clinical characteristics, Medicare requires SNFs to provide and bill for them whether the services are covered under Part A or Part B of the program. However, SNFs may choose to provide audiology services under Part B. As such, it's common for audiologists to contract with SNFs and independently bill for their services to Part B (Medicare Physician Fee Schedule) as private practice providers.

SNF PPS policies are reviewed and updated annually and are effective for the federal fiscal year (October 1–September 30).

On this page:

Reasonable and Necessary Part A and Part B Services
Consolidated Billing
Medicare Part A Payment Policies
Medicare Part B Payment Policies
- Audiology Services
Other Issues in SNFs
Resources
Questions?

Reasonable and Necessary Part A and Part B Services

SNF services must be reasonable and necessary for Medicare coverage. According to the Minimum Data Set (MDS) Resident Assessment Instrument (RAI) Manual, to be considered medically reasonable and necessary, services must be

directly and specifically related to an active written treatment plan that is approved by the physician after any needed consultation with the qualified therapist and is based on an initial evaluation performed by a qualified therapist prior to the start of therapy services in the facility;
of a level of complexity and sophistication, or the condition of the resident must be of a nature that requires the judgment, knowledge, and skills of a therapist;
provided with the expectation, based on the assessment of the resident's restoration potential made by the physician, that the condition of the patient will improve materially in a reasonable and generally predictable period of time, or the services must be necessary for the establishment of a safe and effective maintenance program;
considered accepted standards of medical practice; and
reasonable and necessary for the treatment of the resident's condition; this includes the requirement that the amount, frequency, and duration of the services must be reasonable and they must be furnished by qualified personnel.

Although the RAI Manual provides no further detail about what constitutes "reasonable and necessary," the Medicare Benefit Policy Manual [PDF] (see chapter 15, section 220.2) addresses it further. The plan of care must identify goals that functionally benefit the patient or train caregivers. The frequency and duration of services must also be justifiable based on the documented severity of the patient's condition, responsiveness to treatment, and demonstrated change in function. (See also: Documentation of Skilled Versus Unskilled Care for Medicare Beneficiaries)

Consolidated Billing

SNFs are subject to consolidated billing. This means that the SNF must provide and bill for all Part A and Part B services the patient needs. Congress established consolidated billing to prevent double billing for services. While there might be a variety of reasons a SNF might not have a speech-language pathologist (SLP) on staff (e.g., family leave or temporary staffing shortage), this does not relieve the SNF of its obligation to provide speech-language pathology services to a patient who needs them. The SNF must find a way to provide the services if it accepts a patient and has different options to meet its obligation. For example, if the SNF does not have an SLP on staff, it could contract with an SLP in private practice to provide the necessary services. In this scenario, the facility bills Medicare for the SLP’s services and pays the SLP a negotiated rate. CMS does not dictate the amount a contract employee (or any employee) is paid. Additional information on consolidated billing is found in Chapter 6 of the Medicare Claims Processing Manual [PDF].

Medicare Part A Payment Policies

SNF PPS policies are reviewed and updated annually and are effective for the federal fiscal year (October 1–September 31). CMS outlines SNF PPS payment regulations and guidance in the following manuals:

Additional policies may be outlined in local coverage determinations (LCDs) from Medicare Administrative Contractors (MACs). Clinicians should become familiar with relevant manuals and LCDs rather than relying on interpretations from others, including their employers. It is critical to ensure that you, as the individual clinician, comply with Medicare rules and regulations because accountability for compliance is ultimately shared between you as the rendering clinician and the SNF as the billing provider.

Qualifying for the Part A Stay

The Part A SNF benefit covers up to 100 days of post-acute care. To qualify for admission to the SNF under the Part A benefit, the patient must have had a prior stay of at least three days in an acute care hospital. The services provided in the SNF must relate directly to the prior hospitalization or must be necessary to treat a condition that arose after admission to the SNF.

Additional coverage criteria include the following:

The patient must be transferred to the SNF within 30 days of discharge from the three-day stay.
The patient requires daily skilled care―seven days a week―that can only be provided on an inpatient basis.

The SNF is responsible for providing all of the services a patient needs. (See also: Consolidated Billing)

The Minimum Data Set (MDS)

The MDS assessment tool is a comprehensive summary of the patient’s clinical needs. It’s typically completed by a nurse in consultation with a multidisciplinary care team, including SLPs. However, other professionals may sometimes score specialty areas. For SLPs, those areas are cognitive patterns, communication/hearing patterns, and oral/nutritional status. Time spent on the MDS assessment does not count toward therapy minutes. A full description of how to score the MDS 3.0 is on CMS' website.

The MDS places a patient into a diagnostic category. The SNF receives a lump sum payment based on that category for all the services the patient requires. The services are billed through the SNF rather than the individual clinician(s) who rendered the services. Unlike Part B, Current Procedural Terminology (CPT®) codes are not used for billing in this model. However, they may be used to track services for administrative and productivity purposes. Each facility has its own criteria for tracking services and determining productivity, but these rules are separate from payment policy. (See also: Productivity)

Reporting Therapy Minutes on the MDS

CMS guidelines are clear that time spent on an evaluation should not be reported on the MDS.
If clinically appropriate, treatment can be performed on the same day as an evaluation and counted toward the therapy minutes. Under the Patient Driven Payment Model (PDPM), tracking therapy minutes is important for compliance with group and concurrent therapy limitations and in events where services are billed under Part B. Instructions from administration to limit evaluation and/or treatment time may be an indirect way of trying to maximize payments. Navigating administrative challenges like these can be difficult, but SLPs can advocate for their clinical autonomy directly with their employer to maintain compliance with Medicare requirements and professional standards of practice.
If the facility measures productivity using only the treatment minutes recorded in the MDS, the SLP's productivity may appear reduced because evaluation time is not counted. Ask your employer how your productivity is calculated and whether the calculation includes time spent on activities like evaluations, screenings, and documentation. If your employer uses only treatment minutes to calculate productivity, consider asking your employer to account for those additional activities beyond treatment in its calculations, as these activities are an important component of patient care.
Although minutes of therapy no longer drive SNF payments, CMS still requires SNFs to report the minutes of therapy provided to prevent underdelivering care and to track compliance with regulatory requirements.

Considerations for Performing Evaluations in SNFs Under Part A

Clinicians are ethically bound to deliver services that they believe are appropriate for a patient based on their independent clinical judgment.
Administrative mandates (e.g., "evaluations must never exceed 15 minutes") are inappropriate. Clinicians should conduct and bill accordingly for an evaluation that provides the information necessary to make a diagnosis and develop a plan of care.
It should be the SLP’s discretion to determine time billed for an evaluation versus treatment.
Valuable information may be gathered through dynamic observation of the patient performing therapeutic activities in addition to administration of standardized or formal testing.

The Patient-Driven Payment Model (PDPM)

The Medicare PDPM, implemented on October 1, 2019, was a major overhaul to the SNF PPS. This model addresses concerns that a volume-based payment system creates financial incentives to provide unnecessary care. PDPM is driven by the patient’s clinical characteristics, not by the number of therapy minutes provided. PDPM uses Section O of the MDS to track the delivery of therapy services, including a limitation on the use of group and concurrent therapy [ZIP] combined at 25% of all therapy provided to the patient, per discipline.

Speech-Language Pathology Case-Mix Factors

Under PDPM, payment for patients with speech-language pathology needs are determined by the presence of the following five case-mix factors:

the patient’s primary diagnosis;
the presence of one or more of 12 comorbidities (aphasia; CVA, TIA, or stroke; hemiplegia or hemiparesis; TBI; tracheostomy care while a resident; ventilator or respirator while a resident; laryngeal cancer; apraxia; dysphagia; ALS; oral cancers; speech and language deficits);
a mechanically altered diet;
a swallowing disorder; and/or
a cognitive impairment.

For example, a SNF resident who meets the criteria for all five factors would get a higher speech-language pathology payment than a resident with only one or two of these case-mix factors.

See: CMS Fact Sheet on PDPM Patient Classification [ZIP]

Speech-Language Pathology Diagnosis Codes

Diagnosis codes (International Classification of Diseases or ICD-10) have two distinct roles under PDPM. They are used to identify the primary diagnosis and secondary or treating diagnosis(es).

Primary Diagnosis: SNFs assign an ICD-10 code to report the patient’s primary diagnosis, or the reason for the SNF stay. The primary diagnosis is coded within Section I0200B and maps to a clinical category. Speech-language pathology related primary diagnoses that map to the acute neurologic clinical category trigger speech-language pathology payment. These diagnoses are limited to speech, language, and swallowing disorders due to cerebrovascular accident (CVA) and aphasia.

Secondary or Treating Diagnosis(es): Clinicians will use ICD-10 codes to capture additional diagnoses and comorbidities associated with the patient. These codes can factor into classification of patients into a speech-language pathology comorbidity payment. Currently, the diagnoses that trigger a speech-language pathology comorbidity payment within Section I800 of the MDS are limited to amyotrophic lateral sclerosis (ALS), oral and laryngeal cancers, and speech, language, and swallowing disorders due to CVA.

The ICD-10 codes for primary diagnosis or comorbidities that trigger a speech-language pathology payment are limited because the historical claims data CMS used to develop PDPM did not include enough information associated with cognitive, communication, and swallowing disorders. However, the lists may be modified over time as CMS refines the payment system. SLPs can find the ICD-10 codes that map to clinical categories or trigger comorbidity payments on the CMS website (go to “PDPM Resources” and select “PDPM ICD-10 Mappings” for the most recent year).

It is important for SLPs and SNFs to report all relevant ICD-10 codes for cognitive, communication, and swallowing disorders—not just the primary diagnosis for the SNF stay.

This includes secondary medical or treating diagnoses that help explain the person’s condition, even if those codes aren’t on the PDPM lists.

Secondary medical and/or treating diagnoses can and should be used even when they are noted as “return to provider” codes within PDPM clinical category mapping. The “return to provider” note only applies to the primary diagnosis area. It’s not appropriate for the MDS or SNFs to require SLPs to change their secondary medical and/or treating diagnoses to different diagnoses that will trigger a speech-language pathology and/or comorbidity payment.

Accurate, comprehensive coding to the highest level of clinical specificity for diagnoses related to cognitive, communication, and swallowing disorders will help ASHA advocate for future changes to PDPM, including the addition of more ICD-10 codes that trigger a speech-language pathology and/or comorbidity payment.

(See also: CMS PDPM Presentation [PDF] – page 24)

Payment for Speech-Language Pathology Services Is Unique

It is also important to note that payment for speech-language pathology services is different from payment for occupational and physical therapy (OT and PT). For example, ASHA successfully advocated for the inclusion of comorbidities in the speech-language pathology portion of the SNF payment. PT and OT are not reimbursed for comorbidities. Another key distinction is that PT and OT payments decrease as the episode goes on (known as a variable per diem payment) while speech-language pathology payment is consistent across the episode.

Administrative Mandates and Ethical Considerations

PDPM underscores more than ever the importance of clinical judgment and the need to report potentially inappropriate administrative mandates and behavior. Although PDPM was meant to alleviate pressures to provide as much therapy as possible, it does not address industry-developed pressures such as productivity requirements.

PDPM brings other challenges for SLPs. For example, the additional payment for patients on mechanically altered diets could unintentionally encourage facilities to put patients on these diets when they don’t need them or keep patients on them longer than necessary. Additionally and unsurprisingly, some SNFs have dramatically scaled back the provision of therapy services, including speech-language pathology services, and have restricted the amount, frequency, and duration of therapy plans of care. These limitations are not imposed by Medicare but instead are likely an effort to maximize profit for the SNF. Medicare always expects care to be delivered based on the patient’s needs, not based on administrative mandates.

ASHA has resources to help dispel the myths surrounding PDPM and to empower you to explicitly show and communicate the value SLPs bring to patient care in SNFs. These resources include information to help you

Remember, it is critical for services to be driven by patient need, not by administrative or payer mandates. ASHA, the American Occupational Therapy Association (AOTA), and the American Physical Therapy Association (APTA) are committed to ensuring clinical judgment drives patient care decisions under PDPM. When faced with an inappropriate administrative mandate, please use the above resources and the ASHA, AOTA, and APTA consensus statement [PDF] to advocate on behalf of your patients and demonstrate the value of your clinical judgment in driving patient care.

If you feel you are being asked to do things that violate ASHA’s ethical standards or payer requirements, or that are contrary to patient needs, there is a mechanism available to report these concerns [PDF]. Compliance reporting allows clinicians to alert decision-makers, including employers and oversight agencies, about inappropriate mandates.

Ongoing Monitoring and Advocacy

ASHA actively engaged in the development of PDPM through formal written comments, meetings with CMS staff, and speech-language pathology member representation on technical expert panels to ensure a move to such a payment model represents appropriate clinical practice.

PDPM was designed to be budget-neutral but removes financial incentives to provide more therapy than necessary. SNFs receive the same level of payment, but the way in which the funds are allocated changes. For example, in some instances there might be more funding for nursing services than for therapy services, depending on the patient’s clinical characteristics. Despite the obligation to implement PDPM in a budget-neutral way and to provide all medically necessary services, many therapy positions were eliminated or subject to reduced hours or wages during the transition to PDPM. ASHA continues to monitor the impact of PDPM on SLP employment and patient access to care. ASHA also maintains its efforts to improve and refine PDPM.

Medicare Part B Payment Policies

Part B (medical insurance) services are often referred to as doctors' services or outpatient care. However, in SNFs, facilities are reimbursed by Part B for therapy services after the first 100 days. Unlike services delivered under Part A, services delivered under Part B are billed using CPT codes from the Medicare Physician Fee Schedule for each procedure. See ASHA's analysis of the current fee schedule for payment rates under Part B. SNFs and clinical employees must comply with all coding rules, including elements of the service that must be provided and service delivery time.

Audiology Services

If a patient's Part A benefits are exhausted, the SNF may choose to provide audiology services under Part B, but it’s not required to. As a result, it's common for audiologists to contract with SNFs and independently bill for their services to Part B (Medicare Physician Fee Schedule) as a private practice provider. (See also: Medicare Billing of Audiology Services: Billing for Audiology Services Furnished to SNF Patients)

Other Issues in SNFs

Productivity

Productivity can be calculated in several ways. Some facilities set productivity targets and hold SLPs accountable for meeting them. However, SLPs are ethically bound to use their own clinical judgment to decide who they provide services to, how long sessions should be, and how often sessions are needed. ASHA has developed resources in conjunction with APTA and AOTA to help clinicians defend using their clinical judgment [PDF] and understand their reporting obligations [PDF] to corporate compliance if issues are identified.

Productivity is often calculated by dividing the total number of treatment minutes by the total hours the SLP worked. Time spent on evaluations, which don’t count toward treatment minutes, or on tasks when the patient isn’t present lower productivity calculations. Some facilities may include other activities—such as team meetings, family training, or documentation—as part of the productivity calculation. ASHA encourages employers that establish a productivity target to include any activity required for patient care, not just billable time. ASHA has developed resources to support SLPs in influencing productivity.

For Part B, services are billed by CPT codes using rates established annually in the Medicare Physician Fee Schedule. Each CPT code is calculated by relative value units (RVUs). Unlike occupational therapy and physical therapy, the majority of speech-language pathology codes are not time-based. However, some managers may assign a fixed number of minutes or RVUs to specific CPT codes. For example, if a manager assigns 30 minutes to all speech-language pathology treatment sessions, the SLP must treat at least 12 patients to achieve six hours of productivity (75% productivity based on an eight-hour day).

In addition, SLPs deliver individual treatment far more frequently than group or concurrent treatment, which may differ from physical/occupational therapy and result in differences in calculated productivity.

Supervision Requirements for Students, Clinical Fellows, and Assistants

Assistants

Federal law does not currently recognize audiology or speech-language pathology assistants as qualified providers, so these support personnel cannot treat Medicare patients, and Medicare will not pay for their services. Services provided by physical and occupational therapy assistants can be paid if the assistant meets specific requirements, including graduating from an accredited two-year associate’s degree program, passing a national exam, and obtaining state licensure.

While ASHA has developed a certification program for assistants, as currently structured it does not meet federal legal requirements for recognition as a qualified professional. For example, there is currently no national exam used outside of the ASHA certification process or national standardization for educational requirements and state licensure for audiology and speech-language pathology assistants in every state. Once these milestones have been achieved, ASHA can advocate with Congress to recognize these important support personnel.

Clinical Fellows

For services provided by clinical fellows (CFs) to be covered by Medicare, at a minimum the CF must be licensed by the state. If the CF has not obtained a license, then they are considered a student, and the student supervision standards (described below) must be followed. ASHA has received reports that some MACs are not recognizing temporary, limited, or restricted licensures for the purposes of Medicare coverage. To avoid disruptions in operations and payment, SNFs may want to contact their MAC directly and ask whether the CF licensure standards in their state qualify. ASHA recommends the SNF obtain any answers in writing, if at all possible, to avoid an adverse determination in the event of an audit.

If the CF is licensed in the state and approved by the MAC, they can practice independently without a specified level of supervision for payment purposes.

Students

Under Medicare, student supervision requirements vary by practice setting and whether the services are covered under Medicare Part A or Part B. For example, Medicare is explicit that student services under Part B require 100% direct supervision by the licensed SLP. Conversely, Medicare has largely been silent on the level of supervision required under Part A.

Medicare regulations [PDF] state "each SNF would determine for itself the appropriate manner of supervision of therapy students consistent with applicable state and local laws and practice standards."

However, CMS clarified that the supervising clinician cannot treat another resident or supervise another student while the student is treating a resident. The CMS restrictions on billing students' services are based on two principles:

The student is considered an extension of the therapist, for billing purposes.
Only one billable service can be provided at one time by the student/supervisor.

Billing guidance includes the following:

Report as individual therapy when the SLP or student is treating one resident, while the other is not treating/supervising any other residents/students.
Report as concurrent therapy (i.e., patients are performing different activities) if the SLP is treating two residents while the student is not treating any residents or if the student is treating two residents while the SLP is not treating any residents.
Report as group therapy (i.e., patients are performing similar activities) if the full group is conducted by either the supervising SLP or the student; the other may not be supervising any other students or treating residents.

When determining the appropriate level of supervision of a student, the supervising SLP should consider payer policy, the requirements of the university from which they have received the student intern, state law, ASHA standards, the needs of the patient, and the skills of the student. Some patients may not be suitable for treatment by a student, regardless of the level of supervision. Additionally, some students may require a greater degree of supervision than their counterparts with more experience.

Group and Concurrent Therapy

Medicare provides detailed guidance for group and concurrent therapy in SNFs. The use of group and concurrent therapy combined cannot exceed 25% of a patient’s episode of care per rehab therapy discipline.

Medicare defines groups as two to six patients performing similar activities. Medicare defines concurrent therapy as treatment of two residents at the same time who are not performing the same or similar activities, regardless of payer source, both of whom must be in line-of-sight of the treating therapist for Medicare Part A. Concurrent therapy is not covered under Medicare Part B. Group therapy is allowed under Part B.

PDPM makes group and concurrent therapy financially appealing options for SNFs. ASHA frequently receives reports that SLPs in SNFs are being directed to increase the amount of group/concurrent therapy and decrease the amount of individual therapy. Use ASHA's resource on modes of service delivery to help make treatment decisions and educate your administration and supervisors about the clinical appropriateness of the different modes of treatment.

Instrumental Assessment of Dysphagia

SNFs may push back against the SLP’s request for videofluoroscopic or fiberoptic endoscopic evaluation of swallowing studies for Part A patients. The cost of the procedure, including transportation to and from the evaluation site, is paid by the SNF out of the patient's per diem rate (see Consolidated Billing). If the SLP identifies the need for an instrumental assessment, the SLP should clearly communicate and document the rationale.

Instrumental procedures are the only way to visualize swallowing physiology and laryngeal, pharyngeal, and upper esophageal anatomy. They are also used to determine appropriateness and effective treatment strategies. Instrumental studies that support the SLP’s treatment plan can potentially save the facility money by reducing the cost of care of patients on altered textures, risk for state and other survey tags, and hospital readmission. SLPs should know and follow state regulations for instrumental assessments when completed in-house.

Payroll-Based Journal Reporting Requirements

SNFs are required to electronically submit direct-care staffing information based on payroll and other auditable data. This includes agency and contract staff. The data, combined with census information, is used to report the level of staff in each nursing home and employee turnover and tenure. Staffing levels and consistency affect the quality of care delivered.

To facilitate data collection, CMS developed a system for facilities to submit staffing and census information called the Payroll-Based Journal (PBJ). This system allows staffing and census information to be collected regularly and frequently. It is auditable to ensure accuracy. All long-term care facilities have free access to this system.

Currently, speech-language pathology and occupational therapy data are not reported to the PBJ. Only physical therapy information is captured.

Requiring SNFs to report therapy data for all three disciplines could help hold facilities accountable for providing the therapy patients need. However, the way the data is currently reported could create false impressions about the types and quality of care SNFs provide. Now, SNFs report the total number of physical therapy minutes across all patients. Since not every patient receives physical therapy, the data might make it look like SNFs are providing less physical therapy than they actually are. This could lead patients and other stakeholders to draw inaccurate conclusions about the care a facility provides. ASHA is working with CMS to explore if, how, and when speech-language pathology services could be added to this reporting system.

Improving Medicare Post-Acute Transformation (IMPACT) Act

In 2014, Congress passed the IMPACT Act in an effort to better understand the differences in payments and outcomes among four post-acute care settings: SNFs, inpatient rehabilitation facilities, home health, and long-term care hospitals. The IMPACT Act requires the standardization of data across those four settings. Currently, each setting has its own distinct assessment tool—for example, SNFs use the MDS. These separate assessment tools do not always collect or track data the same way, making it difficult to evaluate the distinctions between the settings. However, CMS has already begun—and will continue—to change the assessment tools to comply with the mandates of the IMPACT Act. The IMPACT Act also requires reports examining the possibility of implementing a unified PPS across all four settings.

ASHA Voices podcast: A New Payment System, Changes in SNFs

Resources

ASHA Resources

CMS Resources

SNF PPS Resource Center
PDPM Resource Center
SNF PPS Payment Model Research
CMS MDS 3.0 RAI Manual (tips for completing sections of the MDS)

Questions?

Contact ASHA’s health care policy team at reimbursement@asha.org regarding Medicare policy.
Contact ASHA’s health care services team at healthservices@asha.org regarding clinical practice.

American Speech-Language-Hearing Association

Medicare Skilled Nursing Facility Prospective Payment System

Audiology and Speech-Language Pathology Services